GCC boards must elevate value creation to earn investor trust
Many regional boards still believe that investor trust only stems from positive announcements. That could not be further from the truth. It comes from having a value creation track record. Investors like companies that say what they are going to do and then do it. They also want management to be honest about risks that are not immediately visible to them.
GCC BDI: How are capital market dynamics in the GCC evolving, and what trends are shaping investor behaviour today?
Schutzmann: I think GCC equity markets have changed quite profoundly over the past two decades.
When I arrived in the UAE in 2006, regional markets were local markets. They were mainly influenced by domestic liquidity and retail investors. That began to change when the UAE, Qatar, Kuwait and Saudi Arabia entered the Emerging Markets indices because that brought the region into the spotlight of international institutional investors who had largely seen the GCC as a source of capital, not a destination of capital.
Over the past five years alone, we’ve seen tens of billions of US dollars in cumulative net foreign inflows into GCC markets, with Saudi Arabia and the UAE receiving the largest share.
So, this is no longer only a story about local money. The daily trading activity is now largely driven by international institutions. For instance, in FY2025, nearly 40% of traded value in Saudi Arabia was attributable to foreign institutions.
In a retail market, companies can get away with hiding behind the veil of “no comment” or PR spin in quarterly results. But in an institutional market, investors have completely different standards. They want to know if a company has growth potential, if management can generate returns in excess of the cost of capital, if management can be trusted to invest in growth and return the appropriate amount of capital, and whether management does what it promised it would do.
The last change is probably the most interesting one. The market itself is forcing GCC companies to mature. Until recently, many behaved more like private companies that happen to be listed. They engaged episodically and expected investors to work out the investment case on their own.
We are starting to see more companies look and behave like mature global companies. These developments represent meaningful progress toward the standards expected in developed markets.
GCC BDI: From your perspective, what drives investor confidence in the region’s current environment?
Schutzmann: Trust is everything. Investors need to trust the business model and the management team. That immediately becomes visible in times of distress.
When markets are relatively calm, investors can focus on growth stories, dividends and the broader regional opportunity. When there is a geopolitical shock, they will ask some really difficult questions, including: Will your business keep operating? How exposed are your margins and cash flows? How long will liquidity last? How quickly will management change its capex plans, leverage or dividends if the business landscape deteriorates further?
Many regional boards still believe that investor trust only stems from positive announcements. That could not be further from the truth. It comes from having a track record.
Investors like companies that say what they are going to do and then do it. They want management to be honest about risks that are not immediately visible to them. They dislike broad reassurances because the chances are that investors have seen a similar playbook somewhere else and know how that ends.
That is why many companies lose investor trust when they delay bad news, react like a deer in the headlights to every headline, and try to manage their daily share price with positive statements. That creates the impression that management is not in control.
Companies that build trust do the opposite. They engage early, use public forums like analyst calls to explain the decisions they are making, they highlight the risks and demonstrate how the business will endure longer periods of volatility.
GCC BDI: How should boards position their organisations to remain attractive to both regional and international investors?
Schutzmann: I think boards need to hold up a mirror and ask a simple question. Would an investor understand why this company deserves their money if they looked at it for the first time?
Many companies in the region have fundamentally strong businesses, but they don’t always know how to translate that strength into a convincing investment case. They report quarterly results, announce strategic milestones after they’re laready met, but they wrestle with explaining long-term value creation and painting an accurate picture of where the business will be in 5 or 10 years.
For boards that means capital markets positioning has to go beyond regulatory disclosures. The most advanced GCC companies, for example Saudi banks, give investors a framework. They portray an accurate picture of the bank in the future, explain their strategic, financial and operational roadmap and report detailed progress every quarter. That allows investors to confirm or discredit their investment thesis.
Boards should position their organisations as companies that can be understood, measured and trusted over time. That is what ultimately attracts both regional and international capital. That is why mature public companies do not treat investor engagement merely as a marketing function when the sky is blue. The board, CEO, CFO, IR team and broader management also need to have the same view of the market’s expectations when the sky is grey.
GCC BDI: Looking ahead, what should boards prioritise to strengthen their capital markets narrative and access to investors?
Schutzmann: Based on conversations with company leadership and investors, I believe GCC boards would benefit from spending more time understanding who and what really drives their share price.
That starts with an outside-in perspective. Many boards still operate with outdated assumptions about what investors expect.
Some believe that earnings guidance is not allowed, even though all public Saudi banks now provide guidance. Others remain hesitant on strategy disclosure because they believe they will give away their competitive advantage. Many others still see no need for quarterly earnings calls, although the number of GCC earnings calls has risen from fewer than 10 companies a decade ago to more than 130 per quarter today, representing around 80% of total GCC market capitalization.
However, the deeper challenge is that many boards still look at the company mainly through the P&L, while institutional investors look at cash flows, moat and capital allocation. For example, many companies don’t seem to look at whether they consistently generate returns above their cost of capital. Only a few companies publish a dividend policy, not to mention a capital allocation policy.
Therefore, the priority needs to be to move from reporting activity to explaining value creation. Investors do not need a laundry list of everything the company is doing. They want to know the three or four key things that will make returns sustainable, where growth will come from, how capital will be used, and what management will do if market conditions change.
Valuation is ultimately the product of business model performance and trust in management capability.
What role does governance play in influencing valuation, transparency and long-term investor trust?
Governance is fundamental because it tells investors how a company will behave when tough decisions need to be made. Quite often, governance can sound like a compliance topic, but investors see it differently. They are trying to assess if the board will protect minority shareholders, if capital will be allocated responsibly, and whether management will be held accountable. If they have doubts on any of those points, they will either demand a lower valuation or could avoid the company altogether.
Transparency is part of the same equation. A well-governed company not only publishes more information, but also information that helps investors make buy, sell or hold decisions. That means consistent KPIs, explanations of what drove and held back performance, and enough forward-looking context to understand where management sees the business in 3-5 years.
This interview with Oliver Schutzmann, CEO of Iridium, originally appeared in the June 2026 GCC Board Directors Institute (GCC BDI) Newsletter.